What is a Fuel Surcharge in Credit Cards

A fuel surcharge is an additional fee charged when you use your credit card to pay for fuel. This charge is typically 1%-3% of the transaction amount and is added to your fuel bill. It covers the costs of processing credit card payments at petrol pumps. 

 

Petrol pumps and credit card issuers impose this surcharge to offset expenses such as payment processing fees, interchange fees, and operational costs. While it may seem like a small amount per transaction, frequent fuel purchases can lead to significant additional costs.

A fuel surcharge waiver is a benefit offered by many credit card issuers that removes or reduces the extra fee typically charged on fuel purchases. When you use your credit card to pay for fuel, a surcharge of around 1% to 3% of the transaction amount is usually added to the bill. With a waiver, this additional cost is either fully or partially covered by the card issuer, effectively lowering your fuel expenses.

 

This waiver helps with fuel surcharge exemption, but it is usually subject to specific conditions. These may include a minimum transaction amount, a cap on the total waiver you can get per month, or restrictions on eligible petrol pumps.

A fuel surcharge is a percentage of the total fuel transaction amount. If the surcharge is 2% and you spend ₹4,000 on fuel, the surcharge would be:

₹ (4,000 × 0.02) = ₹80

To get a fuel surcharge waiver on your credit card, you need to meet certain eligibility requirements set by the bank:

• Age and Residency

Any Indian resident or non-resident between 18 and 70 years can apply for a fuel credit card

• Creditworthiness

Banks may check your credit score and credit history before approving your credit card application

• Minimum Transaction Amount

To qualify for a fuel surcharge waiver, your fuel purchase must meet the minimum transaction amount set by the bank

Here are some of the key documents required to get a fuel surcharge waiver:

• You must submit a PAN card or Form 60

• A recent passport-sized photograph

• Proof of income (latest salary slip, Form 16, or IT return copy)

• Valid identity and residence proof

A fuel surcharge waiver on credit cards removes the extra fee applied, helping you save on each fuel transaction, making fuel credit cards a cost-effective choice. However, the surcharge waiver is applicable only at petrol pumps partnered with the respective credit card company. It’s important to check whether your preferred location is eligible for the waiver.

 

Here’s how the fuel surcharge waiver works:

 

If you make a fuel purchase of ₹4,000 and your credit card has a 2.5% fuel surcharge, the additional fee would be:

 

₹4,000 × 2.5% = ₹100 surcharge

 

Now, if your card issuer offers a 100% waiver, you don’t pay this ₹100 fee. But if the waiver is capped at 50%, only half of the surcharge would be waived:

 

₹100 × 50% = ₹50 waived

 

This means you still pay ₹50 as a fuel surcharge. The higher the waiver percentage and cap, the more you save on fuel transactions.

Banks set a maximum limit on the fuel surcharge waiver, meaning you can only get the waiver up to a certain amount per billing cycle. Once you reach this limit, any further fuel transactions will incur the full surcharge.

 

For example, if your credit card issuer offers a 2.5% fuel surcharge waiver but has a ₹400 monthly cap, you can get a waiver only until the total waived amount reaches ₹400 in a billing cycle. After that, any fuel purchases will include the full surcharge.

To benefit from a fuel surcharge waiver, you need to choose the right credit card and use it at eligible petrol pumps.

 

Here’s how you can ensure you get the waiver:

1.  Select a credit card that comes with a fuel surcharge waiver

Compare different fuel credit cards to find the one that provides the highest waiver percentage and a reasonable monthly cap.

2. Check the transaction and waiver limits

Ensure the card’s minimum transaction amount and waiver cap match your fuel expenses. Some cards require a minimum spend to activate the waiver.

3. Use the card at eligible petrol pumps

The waiver applies only at specific petrol pumps affiliated with the credit card network. Verify if these locations are convenient for you.

4. Ensure the waiver is applied automatically

Most banks automatically apply the waiver on qualifying transactions, but some may require manual claims. Always review your statements to confirm the waiver has been applied.